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[2016] ZALAC 42
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Solidarity obo Smook v Department of Transport Roads and Public Works (JA68/15) [2016] ZALAC 42; (2016) 37 (ILJ) 2626 (LAC); [2016] 12 BLLR 1201 (LAC) (15 June 2016)
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA, JOHANNESBURG
Reportable
Case
no: JA 68/15
In
the matter between:
SOLIDARITY
obo HENDRICK JOHANNES
GUSTAVUS
SMOOK
Appellant
and
THE
DEPARTMENT
OF
TRANSPORT
ROADS
AND PUBLIC WORKS
Respondent
Heard:
05 May 2016
Delivered:
15 June 2016
Summary:
Reinstatement of the appeal – court considering only prospects
of success of the appeal –
two awards issued by the arbitrator
– court finding that arbitrator
functus officio
when
issuing the first unsigned award, which was final as, served on both
parties – requirement of signing award is directory
and not
peremptory. Labour Court correctly finding that employee entitled to
relief in terms of the first unsigned award –
no prospects of
success – reinstatement of the appeal dismissed.
Coram:
Tlaletsi AJP, Ndlovu JA
et
Murphy AJA
JUDGMENT
MURPHY
AJA
[1]
The appellant, Mr. HJG Smook, appeals against part of the judgment of
the Labour Court (Prinsloo AJ) in which it dismissed the
respondent’s
application for review of an arbitration award, but, in the somewhat
unusual circumstances described below,
refused the appellant
reinstatement and limited the relief to payment of compensation.
[2]
The appellant has applied for condonation for non-compliance with
various provisions of rule 5 of the Labour Appeal Court Rules
and
reinstatement of the lapsed appeal. The grant or refusal of
condonation in the final analysis will depend on the prospects
of
success as assessed in light of the merits of the appeal. It is
accordingly best to deal directly with the merits.
[3]
The appellant was dismissed by the respondent more than 11 years ago,
on 15 April 2005. He referred a dismissal dispute to the
General
Public Service Sectoral Bargaining Council. The referral resulted in
two arbitration awards being issued by the arbitrator
appointed by
the bargaining council, Mr S Osman. Both awards are dated 18 July
2006. They are similar in all material respects
except that they
provide different remedies. The relief granted in the awards is
materially different and there is no reference
in the second award to
the first. It is common cause that the first award was not signed
whereas the second award was signed.
[4]
In the unsigned first award, under the heading “Remedy”,
the arbitrator stated:
‘
The
applicant initially sought retrospective reinstatement however
amended the relief sought to maximum compensation. A lengthy
argument
was submitted for maximum compensation and various case law was
cited. I have considered the argument before me and am
of the opinion
that compensation was to awarded (sic) as just and equitable and
should not be seen to reward the applicant for
the alleged
unfairness. In
Ferodo
v De Ruiter
(1993) 14 ILJ 974 (LAC) the Court held that all relevant factors
should be considered and outlined the factors. None of these factors
were before me in order to consider the prejudice to the applicant.
However in view of the dismissal being both procedurally and
substantively unfair I am inclined to believe that the applicant had
incurred minimal expense in view of him being a member of
a union.
There was no argument before (sic) as to his loss or current
employment status. Neither did the respondent submit an argument
to
mitigate the compensation that I might award. In view of this I am
inclined to make the award of six months’ salary as
compensation.’
[5]
Having declared the dismissal to be both procedurally and
substantively unfair, the arbitrator awarded the appellant an amount
of R132 815, 50; being the equivalent of six months’
salary. Although the reasoning suffers a measure of incoherence,
it
is clear that compensation was awarded on the basis of an amendment
of the relief sought and after taking account of certain
considerations, some of which, strictly speaking, might not have been
relevant.
[6]
The part of the signed second award dealing with remedy is notably
different. It reads:
‘
The
applicant sought retrospective reinstatement. In terms of section
193, a commissioner may compensate, reinstate or order employment.
There was nothing before me that suggested that the employment
relationship had become intolerable. I am therefore inclined to
order
reinstatement since the dismissal was found to have been both
procedurally and substantively unfair.’
[7]
The arbitrator ordered reinstatement with effect from 1 August 2006
and ordered the respondent to pay the applicant the amount
of
R265 629 as “retrospective pay”.
[8]
On 22 September 2006, the respondent filed an application with the
Labour Court seeking to review and set aside both awards.
It
explained in its founding affidavit that it received the signed
second award on 20 July 2006, the day after it received the
first
award on 19 July 2006. The circumstances in which that happened are
not clear. However, the appellant admitted the relevant
averments in
his answering affidavit. Hence, it is common cause that the unsigned
award was issued by the arbitrator before the
signed second award.
[9]
It is unnecessary to canvass the facts and circumstances related to
the unfair dismissal or those which led to a considerable
delay in
the review being prosecuted. There is no challenge before us to the
finding of unfair dismissal. However, on 26 April
2011, the appellant
filed a notice of motion with the Labour Court in terms of rule 11
seeking an order dismissing the respondent’s
application for
review due to the respondent’s failure to comply with rule 7(A)
and its failure to prosecute the review application
expeditiously.
[10]
When the matter came before the learned judge on 18 January 2013, she
issued an
ex tempore
judgment in which she
inter alia
dismissed the respondent’s application for review on the ground
that it had not been prosecuted expeditiously. There is no
appeal by
either party against that order.
[11]
The learned judge then faced the difficulty of deciding which award
granting the appellant relief was the operative one. She
reasoned as
follows:
‘
I
may state that there is no record filed, so it is impossible to
determine from the two arbitration awards what relief was indeed
sought by the applicant. In the one award it is stated that the
applicant sought retrospective reinstatement, and in the other
the
commissioner stated that the applicant sought retrospective
reinstatement but amended it to maximum compensation, and that
a long
argument ensued in respect of that. There is no record to assist this
Court and to indicate which one of the two arbitration
awards in fact
captured the relief sought correctly.’
After
dealing with the grounds for dismissing the review application, and
trenchantly criticising the arbitrator for his conduct
and failing to
file an affidavit explaining it to the court, the learned judge
continued:
‘
The
fact that there are two conflicting awards definitely creates a
serious problem in this matter. The commissioner initially awarded
compensation, and in issuing that award the commissioner became
functus
officio
.
And subsequently, the same commissioner issued another award and the
relief in the second award differed materially from the relief
set
out in the first award; it went from compensation to retrospective
reinstatement.
This
is a variation that is definitely not provided for in the rules of
the bargaining council or in the provisions of the Labour
Relations
Act. In section 144 of the Labour Relations Act, provision is made
for variation and rescission of arbitration awards
and a commissioner
may vary or rescind an arbitration award or a ruling erroneously
sought or erroneously made in the absence of
any party affected by
that award. This is clearly not the case in casu; both parties were
present and the award was not erroneously
made in the absence of the
parties.
The
second provision for variation as set out in section 144 of the
Labour Relations Act is if there is ambiguity or an obvious
error or
an omission, but only to the extent of that ambiguity, error or
omission or an ambiguity. In my view what the commissioner
did in the
second award, was not merely correct something contained in the first
award, but was to issue a completely different
award with completely
different relief to the applicant. Compensation was changed to
retrospective reinstatement.
In
my view, the first award should be accepted as the valid and binding
award, as the commissioner became
functus officio
by issuing
that award and he was by no means in any position whatsoever to vary
that award. And by failing to provide any explanation,
despite being
cited as a party to these proceedings, leave me (sic) with no other
option but to accept he became
functus officio
. He was never
in a position to issue the second arbitration award. It is trite that
the doctrine of
functus officio
applies to CCMA proceedings
and awards issued by commissioners.”
[12]
The Labour Court accordingly made orders dismissing the review
application and declaring that the appellant was entitled to
the
relief as set out in the first award. It is against this latter order
that the appellant appeals. The learned judge made no
mention in her
judgment of the fact that the first award was not signed, nor
therefore did she canvass the implications of that
fact. There is no
indication that the issue was raised with her in argument.
[13]
Before dealing with the grounds of appeal, it will be useful to say
something about the doctrine of
functus
officio
.
The rationale of the doctrine is founded on the principle of the rule
of law which holds that individuals should be entitled to
rely on
governmental decisions, and to be able to plan their lives around
such decisions, insulated from the injustice that would
result from a
sudden change of mind on the part of the functionary.
[1]
An official who has discharged his official function by making a
decision is unable to change his mind and revoke, withdraw or
revisit
the decision, unless it is vitiated on acceptable grounds such as
fraud or want of jurisdiction. The doctrine applies only
to final
decisions. And “finality is a point arrived at when the
decision is published, announced or otherwise conveyed to
those
affected by it”.
[2]
In order for the decision to be regarded as final, it must have been
passed into the public domain in some manner.
[3]
[14]
The appellant in effect argued that the unsigned first award of the
commissioner was not final. He relied in this regard on
the
provisions of section 138(7) of the Labour Relations Act
[4]
(“the LRA”). It reads:
‘
(7)
Within 14 days of the conclusion of the arbitration proceedings –
(a)
the commissioner must issue an arbitration award with brief reasons,
signed by that commissioner;
(b)
the Commission must serve a copy of that award on each party to the
dispute or the person who represented a party in the arbitration
proceedings; and
(c)
the Commission must file the original of that award with the
registrar of the Labour Court.’
The
appellant submitted that these provisions are peremptory and until
the requirements are met, an arbitration award will have
no legal
effect. Hence, because the first award was not signed it had no legal
effect and thus presented no bar to the issue of
the second signed
award. The first award, it was contended, was accordingly not a final
decision. There is no dispute that the
first award was in fact served
and thus conveyed to those affected by it. It passed into the public
domain in that manner. The
only question then is whether an award
must be signed in order to assume the character of finality.
[15]
It is trite that as a general rule, statutory requirements must be
observed. But it is not always the case that non-compliance
will
automatically result in invalidity. The principles governing
non-compliance with statutory requirements are well-established.
The
crucial enquiry is whether the legislature contemplated that the
relevant failure should be visited with nullity.
[5]
No universal rule can be laid down as to whether enactments shall be
considered directory only or mandatory, with an implied nullification
for disobedience. The courts must ascertain the real intention of the
legislature by studying the context and scope of the statute
to be
construed. Various factors must be considered, such as: the
subject-matter of the prohibition, its purpose in the context
of the
legislation, the remedies provided in the event of breach, the nature
of the mischief which it was designed to remedy or
avoid, and any
cognizable impropriety or inconvenience which may flow from
invalidity. Then the court must ask whether it was truly
intended
that anything done contrary to the provisions in question was
necessarily to be visited with nullity.
[6]
An important consideration is whether a declaration of invalidity
would have capricious, disproportionate or inequitable
consequences.
[7]
[16]
The appellant has relied on this Court’s decision in
SAMWU
v SALGBC
[8]
in support of its contention that signature of an award is mandatory
in terms of section 138(7)(a) of the LRA. The judgment is
in fact not
authority for that proposition. It was decided there that an unsigned
e-mail provisionally disclosing the content of
a proposed award did
not constitute an award. The fact that the e-mail was unsigned was
merely an indication that the arbitrator
had not intended thereby to
issue an award. Rather the practice in the Labour Court for some time
has been to regard the requirement
of signature of an award as
directory rather than peremptory, because to insist on strict
compliance would defeat the LRA’s
object to promote the
effective resolution of disputes. The correct approach, in my view,
is that which was articulated by Landman
J (as he then was) in
Free
State Buying Association Ltd t/a Alpha Pharm v SACCAWU and Another
[9]
as follows:
‘
In
my opinion section 138(7)(a) in so far as it relates to the signature
and issuing of an arbitration award, is intended to be
more of a
guideline. It is not intended to be peremptory. It is quite clear
that having regard to human nature a commissioner may
not always be
able to sign and issue an award within the 14-day period. If a
commissioner were to sign or to issue the award after
that period, it
would not be in accordance with the aims of this Act to visit such an
omission with invalidity. If that were to
be done it would simply
mean that the dispute had not reached finality and the arbitration
proceedings would have to take place
de
novo
.
This could not have been intended.’
[10]
Although
the learned judge was primarily concerned with the 14 day period, the
rationale underpinning his decision applies equally
to non-compliance
with the requirement of signature.
[17]
To hold an award, which is valid in all other respects, to be invalid
and a nullity on grounds of non-signature favours form
above
substance and would defeat the LRA’s aim of effective dispute
resolution. The purpose of the signature requirement
is primarily to
identify the arbitrator and secondarily to signify the completion of
the award by him or her. The latter objective
is achieved also by the
issue of the award. Once an award, indisputably authored by the
relevant arbitrator, is conveyed to the
affected parties and has
passed into the public domain, that act signifies completion and
supersedes the necessity for signature.
The seemingly contrary
decision of the Labour Court in
Meyer
v CCMA and Another
[11]
to the effect that an unsigned award would normally be a nullity was
qualified by the judge in that case by his explicit recognition
that
such would not be the case if “there is proof that it is in the
form decided by the arbitrator”.
[18]
Consequently, the unsigned first award issued by the arbitrator in
this case was a final award made final by its service upon
the
parties with the result that the arbitrator became
functus officio
when it was issued. Hence the Labour Court was correct to hold that
the appellant was only entitled to the relief contained in
that award
and accordingly the application for condonation and the appeal must
fail. There is no reason why costs should not follow
the result.
[19]
In the premises, the application for condonation and reinstatement of
the appeal is dismissed with costs.
_________________
JR Murphy AJA
I
agree
________________
Tlaletsi AJP
I
agree
_________________
Ndlovu JA
APPEARANCES:
FOR
THE APPELLANT: Adv S Swartz
Instructed by Haarhof Inc
FOR
THE RESPONDENT: Adv C Tshavhungwa
Instructed by
Mjila and Partners
[1]
Hoexter:
Administrative
Law in South Africa
(1 ed) (Juta 2007) 246-248.
[2]
Ibid
247.
[3]
Ibid
247-248;
President
of the Republic of South Africa v South African Rugby Football Union
2000 (1) SA 1
(CC) at para 44.
[4]
Act
66 of 1995.
[5]
Nokeng
Tsa Taemane Local Municipality v Dinokeng Property Owners
Association and Others
[2011]
2 All SA 46
(SCA) at para 14.
[6]
Palm
Fifteen (Pty) Ltd v Cotton Tail Homes (Pty) Ltd
1978
(2) SA 872
(A) at 885E-G; and
ABSA
Insurance Brokers (Pty) Ltd v Luttig and Another NNO
[1997] ZASCA 61
;
1997 (4) SA 229
(SCA) at 238J-239B.
[7]
Pottie
v Kotze
1954
(3) SA 179
(A) at 726 F-H.
[8]
[2014]
7 BLLR 711
(LAC).
[9]
[1999]
3 BLLR 223 (LC).
[10]
At
para 16.
[11]
[2002]
2 BLLR 186
(LC) at paras 6 and 7.